Indian MSME-led secondary aluminum manufacturing sector are at a critical juncture. The Government of India’s Vision Document for Aluminum has projected national demand to rise from around 5.3 million tonnes to nearly 8.3 million tonnes by 2030. The secondary aluminum sector, focused on manufacturing value-added products, is set to play a key role in taking forward primary aluminum demand.

One of the key requirements for the secondary sector’s growth is the reduction of duty on imports of primary aluminum. The current rate for imports is 7.5 percent, and as a result there is price inflation in the domestic market as well. Given that primary aluminum constitutes nearly 80 percent of the cost of manufacturing a secondary product, it makes domestically manufactured secondary products expensive.

Therefore, Indian MSME’s are unable to compete globally. Even in the Indian market, domestic manufacturers are losing market access due to cheaper imports of secondary products through importers availing benefits of duty-free import under free trade agreements.

To highlight the issue, CUTS International and Association for Secondary Manufacturers Association (ASMA) convened a closed-door event in New Delhi on Wednesday. Navendu K Bhardwaj, ASMA stated that “duty reduction of primary aluminum will enable downstream manufacturers to play a key role in driving demand for aluminum needed for development initiatives to achieve a Viksit Bharat in 2047.

Aluminum value-added products are key components in sectors such as construction, infrastructure, automobiles, and electronics”.

Bipul Chattopadhyay, Executive Director, CUTS International highlighted that “duty reduction for primary aluminum will be key to supporting MSME downstream manufacturers to compete nationally and globally. The current duty structure has created an uneven playing field for secondary users of aluminum”.

The event was attended by key members of CUTS International, Aluminum Secondary Manufacturers Association (ASMA), Invest India, Wires and Cables Association, Federation of India Mineral Industries,

India SME Forum, Centre for WTO Studies, Centre for Domestic Economy Policy Research and other participants.